Tag Archives: fsbo

Mathematical Formula for a Highlands ‘For Sale by Owner’ Sign

If you go down to any Highlands hardware store, you’ll be able to find them. They are right there in the corner, somewhere on the rack that has all the ‘GARAGE SALE’ and ‘BEWARE OF DOG’ placards. They’re the ‘FOR SALE BY OWNER’ signs.

They cost about $8.99 ($17.98 for two). Or, it is also possible to buy a couple of “For Sale by Owner” signs online for about the same price (although getting them delivered to Highlands might run extra).

No matter which way you would get hold of the signs, you should be alerted to some possible extra costs. I don’t mean ‘shipping and handling’ charges you sometimes find tacked onto other offers. These are extras that have cost other sign purchasers thousands of dollars.

Naturally, anyone who buys a ‘For Sale by Owner’ sign has decided to sell their Highlands house on their own rather than going with the crowd and listing through a Highlands Realtor®.

The sign purchaser has probably made that decision for one of two reasons. The first is the less likely—namely, being convinced that he or she will do a better job. Selling your house without the specialized tools—the marketing connections, office backup, support of the professional real estate community—lacks most of the appeal of other Do-It-Yourself projects. Even just handling the technical details (hmmmm…where am I going to put the deposit money so it’s in escrow—or whatever they call it…).

The second reason is much more likely: saving commission dollars! Just thinking about the car you could buy with the savings makes for an appealing daydream…until you remember that you will probably have to pay half of the intended savings to the buyer’s agent. Maybe it’s a used car you could buy…after you’ve paid to post the listing; bought media advertising; maybe printed up some full color marketing materials…

But those aren’t the most crucial ‘extra’ costs associated with those ‘For Sale by Owner’ signs. The extras are head-turning. The latest figures from the NAR show that the ultimate price paid for a FSBO home was $39,000 less than for agent-assisted sales (which typically sold for 98% of their listing prices). The reasons may be many—the most frequently cited being that real estate professionals are experts in attracting qualified buyers. It is, after all, what we do!

So the all-in cost for a couple of ‘For Sale by Owner’ signs could be calculated using a whimsical formula like:

FSBO Cost = 2 x $8.99 + Y

Where Y=a total unknown, but it well might be as much or more that the cost of the car the sign buyer had been hoping to save.

More seriously, though, only 8% of U.S. homes wind up being sold by owners acting alone. Something like 70% of homeowners who tried to sell their homes themselves eventually go with an agent. Then their outlay for ‘For Sale by Owner’ signs is a 100% loss (the hardware store won’t pay anything for the used ones). The good news is, you can avoid all those costs—hidden and otherwise. Just call me: I’ll provide the signs!

Highlands ‘For Sale by Owner’ Signs Include Unintended Messaging

9-4-fsboIf you will be selling your house this fall, an early decision will be whether to team with a Highlands Realtor® or go the “For Sale by Owner” route. One thing to consider is messaging.

“Messaging” is one of those words that Highlands homeowners began to hear a lot after Madison Avenue decided to verbize the noun ‘message.’ I know verbize isn’t a real word, but to me, messaging convolutes English in pretty much the same way.

Messaging rose in popularity about the same time that Hollywood actors and politicians started referring to their own names as their ‘brands’—apparently on the assumption that it makes them sound more valuable. To some of us, it makes them sound more like cattle ranchers.

Nonetheless, since it’s now mainstream to be messaging this and messaging that, whether you’re leaning toward planting a For Sale by Owner sign in the front yard or recruiting a Highlands Realtor, you should be considering the messaging. Once you know that, you can message like crazy, confident that you’re not sending any wrong signals.

Most of the messaging will certainly be about how terrific it would be to live in the house. The subtexts might be that it’s a fantastic place that’s well worth the price asked; that any owner would be proud to invite friends and relatives over; that it’s clearly a leading contender among other Highlands homes in its price range.

With messaging in place, your Realtor can create a complete professional listing, then set the ‘For Sale’ sign in the front yard. For those who would rather go it alone, they can figure out how to pay for the listing they create themselves, then plant a ‘For Sale by Owner’ sign out front.

But that could be where the messaging goes a little haywire.

Yes, a For Sale by Owner sign on a Highlands home announce to the world that the house is For Sale—and that is excellent, unambiguous messaging. But the by Owner part will, for some, carry some additional messaging that’s not quite as positive. Think for a moment about the impression you get whenever you see a house with that sign out front (a nicely printed one…the ones scrawled by hand on poster board don’t even count). Chances are, you are like everyone else: you assume you know something extra about the seller.

The messaging is, at best, This house is for sale by someone who is up front about not wanting to pay for a professional to sell it.

The other messaging takeaways can be less helpful:

Professionals haven’t been able to sell this house for the price you’ll be finding out about soon enough is one possibility.

There is also:

Here is a bargain, sort of like a yard sale—want to pick over what’s here? Or:
This house is going to be cheaper than a real house. Or:
Nobody who is professional will be involved in any way. Or:
If you’d like to get into a personal bargaining situation with someone who considers himself a shrewd negotiator, here’s your chance!

That kind of For Sale by Owner messaging differs greatly from:

This house is professionally represented—the unambiguous messaging all my “FOR SALE” signs send. You’ve probably seen them around Highlands (often with a ‘SOLD’ placard attached). They’ve got my phone number on them, but you don’t have to drive around to find it, since it’s right here on the website. You can call me right now!

Sapphire For Sale by Owner Signs may be an Endangered Species

9-4-fsboThey may be getting rarer, but you still see some Sapphire “For Sale by Owner” signs from time to time. Sometimes they signify an owner who, truth be told, simply doesn’t mind letting it be known that he or she isn’t in much of a hurry to sell the place. This can be true if it’s an extraordinary example of its architectural style, or beautifully landscaped and maintained, or in other ways, from curb to chimney-top, obviously a prime piece of local property. This is a For Sale by Owner anomaly though; you don’t see many of them.

A far greater number of them (‘FSBOs,’ for short) are average, run-of-the-mill homes—or even clearly neglected ones (in the latter case, the For Sale by Owner designation invites passersby to assume the sign really means “Fire Sale!!!”).

But for the everyday-looking Sapphire For Sale by Owner properties, that sign out front has to make you wonder. Currently, 88% of homes are sold through a real estate agent or broker—a percentage that’s been steadily rising for more than a decade. What would impel the owner to take a route that the vast majority of sellers avoid?

There’s often a history behind the sign: a major experience that prompted the go-it-alone venture. That story usually falls into one of two general categories—and they’re polar opposites!

This camp had a pleasure cruise the last time they sold their home. Their agent put together a listing, and BANG! That was it! Showings by the end of the week, and SOLD in days! For the full asking price! A dream closing with no unexpected details, gifts to and from the excited buyers, and nice notes still exchanged at the holidays…

The Happy Story takeaway: selling a house is so simple, why in the world would you gift a commission to a third party? It’s so easy, why not save thousands of dollars? Up goes the ‘For Sale by Owner’ sign…


These folks found themselves all but victimized by a previous home sale. Everything went haywire from the get-go. They may have started on the wrong foot, assuming that every licensed agent is equally qualified and offers the same level of service. From there, it was all downhill. Bad communication, missed appointments, showings to loud-mouthed prospects who made it clear they were not about to pay anything like that asking price. Maybe a change of agents, but the eventual sale, after those lengthy missteps (and perhaps a technical hitch or two at closing) resulted in a disappointing sale price.

The Unhappy Story takeaway: I bet I can do this better, myself! Up goes the Sapphire For Sale by Owner sign…

The current national statistics seem to indicate that the FSBO sign itself is a lot more likely to engender an Unhappy Story result. A typical For Sale by Owner home, if it sold at all, yielded just 80% of what agent-assisted sales brought. Not to mention the hassle of foregoing all the technical and marketing help a good agent brings. The first key to your own Happy Story is to find the right agent—one with a history of Happy Story endings.

This takeaway: call me!

Taking the Fizz out of FSBO: Selling a Sapphire Home Yourself

6-17-fsboYou pronounce it “FIZZ-bow.”

That’s FSBO: For Sale by Owner, and it’s the Road Less Travelled by area homeowners bent on selling a home in Sapphire as economically as possible. It does seem to make common sense, after all. It’s the homeowner who knows the ins and outs of their own home best—so who could be more qualified to show it off to the buyers who’ll be lined up, waiting to take a look?

And even more to the point, why lose any part of the sale proceeds to some Sapphire real estate agent? It can’t be rocket science to fill out the paperwork and complete the sale. Isn’t that just common sense?

For those considering selling a home themselves, even cursory research is likely to result in one nagging question. The latest sampling from the NAR shows that the vast majority—88%, in fact—of today’s successful sellers are assisted by a real estate agent. That proportion has been growing, lately, too: it’s up 19 percentage points since 2001. This has to give rise to the nagging question: “If it’s common sense, how come the vast majority eventually wind up going with a real estate agent?”

What actually happens in a sale plays a large part, starting with an examination of the bottom line of actual sales. It reflects the fact that the customary commission percentage that goes to real estate professionals is split in two, with half going to the seller’s and half to the buyer’s agent. So the net “savings” a FSBO seller stands to realize is half of the usual initial assumption when the buyer is professionally introduced by the buyer’s representative.

Unless the buyer just appears on his or her own.

Which brings up a couple of other potential problems. If the buyer shows up on the seller’s doorstep, who has qualified him or her? (Short answer: nobody). It’s awkward and practically impossible for a homeowner to interview every prospective buyer in depth before showing the home, but having strangers in your Sapphire house with no outside record of the event is at best an iffy prospect. The fact is, most qualified home buyers see the advantage of teaming with a licensed Sapphire real estate agent, whose market knowledge is up to the minute, and who will assist them every step of the way at no cost to themselves. Those qualified buyers stand to be a FSBO’s likeliest prospects, in which case the potential ‘savings’ from a do-it-yourself strategy are halved.

But as a working reality, FSBO sellers run a substantial risk that those hoped-for calls from active agents may be slow to materialize. It is often the case that local agents, noting that the home is a FSBO, place it low on the list of properties their clients have time to tour. Among other indicators, a FSBO listing on the MLS signals to the Sapphire real estate community that the owner is not truly serious about selling the home—else why is it not part of a professional office’s marketing package? Too, buyers’ agents work to protect their clients from difficult situations, and many FSBO sellers are not well-versed and experienced in negotiating and selling houses. Problems can erupt. All things being equal, it means that FSBOs get few showing requests.

Plus, any advertising costs will be paid for out of the owner’s own pocket—an expensive strategy.

It’s pretty clear why almost 9 out of 10 homeowners selling a home go with a qualified real estate agent. I hope you agree—and decide to give me a call!

3 Good Reasons to Avoid Sapphire Homes for Sale by Owner

4-22-fsboLet’s start out by agreeing that a “For Sale by Owner” sign on a Sapphire fence does have a certain appeal. It summons up mental images of a simple, direct relationship: no middle men, just straight talk and fair dealing with the One in Charge! And in fact, in many walks of life, dealing directly with the owner can be a plus. When you’re recommending a retail outlet to friends, telling them that you know the owner strengthens your endorsement.

So when you cruise by a sign announcing a Sapphire For Sale by Owner property—a “FSBO”—you wouldn’t be alone if you were tempted to walk up and knock on the door. Buying a home directly from its owner should be a way to purchase a house at the lowest possible price, what with no real estate professionals getting involved!

That’s the fantasy, and although those assumptions are theoretically possible, in reality, homes being put up for sale by their owners represent a temptation that many experienced home buyers avoid. They have more than one reason.

1. Owners Often Ask for Too Much Money

The principal reason that For Sale by Owner sign went up in the first place is probably because the landowner wants to avoid paying real estate sales fees. They usually run about 6%, with half going to the seller’s broker, half to the buyer’s broker. Unfortunately, For Sale by Owner homes quite often carry higher prices because the owners don’t know how to determine fair market value—or are convinced any property of theirs is a special exception. In fact, some Sapphire For Sale by Owner signs go up precisely because the owner didn’t like what a professional broker’s comparable market analysis revealed.

2. Pertinent Information May Go Missing

Disclosure laws are not getting any less cumbersome, but owners who aren’t familiar with their strict requirements can innocently (or less innocently) fail to toe the line. When significant unseen damage or relevant history is not disclosed, the buyer can wind up footing the bill long afterward. Buyers have some legal recourse, but that results in an expensive, drawn out process.

3. It’s Just Not Convenient to You!

Sellers who eschew the services of the real estate professionals have accepted a lot of responsibilities that come with trying to sell a Sapphire property. Of course, they have to keep on top of their regular responsibilities at the same time. That can make things inconvenient for prospective buyers. When both parties use real estate agents, visits are scheduled in a professional (i.e., predictable) manner. When owners become sellers, though, visiting hours tend to reflect the owner’s lifestyle needs. When buyers can’t visit during business hours or when the owner has a family obligation, it can add extra strain. Likewise, when the scheduling of inspections is difficult or any of the strict paperwork deadlines aren’t met…it’s one reason that explains the NAR’s finding that the percentage of For Sale by Owner offerings have collapsed from 19% to 9% since 1991.

With so many disadvantages, it makes sense for buyers to focus on homes sold by agents instead of owners. With transparently justifiable prices, better information and procedural clarity all helping you land the best buy, it should be easy to cruise by those FSBO signs…and give me a call instead!